Propuestas de valor

Evidence of the Framers’ thinking with respect to economic liberty can be derived from the policies that colonial and state governments pursued in the late eighteenth century. Developments in the legal culture were moving unmistakably, albeit unevenly, toward a freer economy. The decline of mercantilism, the withering of wage and price controls, the pervasive land speculation, the overthrow of the English navigational system, and the rise of contracting all pointed toward a new economic and legal order. No doubt the Framers were familiar with these trends and most likely approved of them. These economic liberty tendencies informed the constitution-making process and dovetailed with deep tenets of Anglo-American constitutional thought.

Leading political figures of the founding generation drew upon currents of constitutional theory and economic philosophy in England. English political theorist John Locke had an enormous impact on the American concept of constitutionalism.213 A proponent of natural law and representative government, Locke famously insisted that the very purpose of government was the preservation of “lives, liberties, and estates.”214 It is difficult to overestimate Locke’s influence. “By the late eighteenth century,” Pauline Maier has cogently noted, “‘Lockean’ ideas on government and revolution were accepted everywhere in America; they seemed, in fact, a statement of principles built into English constitutional tradition.”215 It followed that the Framers generally adhered to the Lockean notion that individual property ownership was a natural right with which government had only limited power to interfere.

The ideas of the Scottish political economist Adam Smith, whose landmark treatise, An Inquiry Into the Nature and Causes of the Wealth of Nations, was published in 1776, also had a strong appeal to Americans.216 A champion of entrepreneurial freedom and the market

213. Ellen Frankel Paul, Freedom of Contract and the “Political Economy” of

Lochner v. New York, 1 N.Y.U. J.L. & LIBERTY 515, 528–37 (2005) (discussing influence of Locke on drafting the U.S. Constitution and state constitutions of the Revolutionary era).

214. JOHN LOCKE, TWO TREATISES OF GOVERNMENT 178 (Mark Goldie ed., J.M. Dent 2000) (1690).

215. PAULINE MAIER, AMERICAN SCRIPTURE: MAKING THE DECLARATION OF

INDEPENDENCE 87 (1997).

216. JAMES L.HUSTON,SECURING THE FRUITS OF LABOR:THE AMERICAN CONCEPT OF WEALTH DISTRIBUTION, 1775–1900, at 69–75 (1998) (discussing the affinity between Smith and American Revolutionary leaders).

economy, Smith urged minimal governmental oversight of economic activity. He stressed the self-adjusting nature of a free-market economy.217 “Smith and his successors,” one scholar has observed, “explained how the ‘invisible hand’ of self-interest in the marketplace produced general well-being in the economy and augmented national wealth.”218 Smith’s assault on mercantilism did much to hasten its decay.219 Although neither the Framers nor the general public embraced a strict laissez-faire policy sometimes associated with Smith, the new nation had largely a free market economy grounded on economic liberty.

Important members of the founding generation underscored this commitment to economic freedom. James Madison, for instance, commented at length on the relationship between property ownership, the economy, and the Constitution. In the famous tenth essay in The Federalist, he maintained that extending the sphere of the proposed new national government would prevent any interest group from gaining control and invading the rights of others. “[A] rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project,” Madison declared, “will be less apt to pervade the whole body of the Union, than a particular member of it . . . .”220 For purposes of this article, Madison’s theory of broad representation as a way to diffuse interest group pressure is less important than his strong disapproval of contractual interference and property redistribution by government, both described as “improper and wicked.” Madison regarded redistributive schemes as not only foolish policy but also as violative of liberty. He was especially concerned about interferences with contractual transactions because they were less apparent than outright confiscation and were therefore more dangerous. To make his views more explicit, Madison stated that “laws impairing the obligation of contracts, are contrary to the first principles of the social compact, and to every principle of sound

217. BERNARD H.SIEGAN,ECONOMIC LIBERTIES AND THE CONSTITUTION 193 (2d ed. 2006).

218. HUSTON, supra note 216, at 69–70.

219. Lars G. Magnusson, Mercantilism, in A COMPANION TO THE HISTORY OF

ECONOMIC THOUGHT 47 (Warren J. Samuels et al. eds., 2003) (analyzing Smith’s critique of the mercantile system); William D. Grampp, The Liberal Elements in English Mercantilism, 66 Q.J.ECON. 465, 465 (1952):

It is also customary to describe mercantilism as the antithesis of liberal, or classical, economic doctrine. Adam Smith used some of his strongest invective against it, and since his time mercantilism has been thoroughly condemned by liberal economists because its practices were the very kind of interference which they always have regarded as useless, unwise, or mischievous.

legislation.”221 He pictured the Contract Clause as a “bulwark in favor of personal security and private rights.”222

As a member of the first Congress, Madison took the lead in formulating the Bill of Rights.223 He included protection for the rights of property owners in his proposals, and two important guarantees were incorporated in the Fifth Amendment, along with procedural safeguards for criminal trials.224 The Fifth Amendment explicitly reflected the Lockean view that protection of property was a chief aim of government. Madison thought of property as imposing a limit on the power of government, thereby allowing a large area for private economic ordering.

Madison’s commitment to economic liberty was underscored in his famous 1792 essay, Property.225 Here, Madison broadly defined property to encompass freedom of expression and religious liberty as well as possessions.226 Reflecting his aversion to special economic privileges, he stressed the right of individuals to follow vocations of their choice:

That is not a just government, nor is property secure under it, where arbitrary restrictions, exemptions, and monopolies deny to part of its citizens that free use of their faculties, and free choice of their occupations, which not only constitute their property in the general sense of the word; but are the means of acquiring property strictly so called. What must be the spirit of legislation where a manufacturer of linen cloth is forbidden to bury his own child in a linen shroud, in order to favour his neighbour who manufactures woolen cloth; where the manufacturer and wearer of woolen cloth are again forbidden the oeconomical [sic] use of buttons of that material, in favor of the manufacturer of buttons of other materials!227

As this suggests, Madison saw one’s ability to acquire property as an inherent aspect of personal liberty.228 To restrict the right to acquire property was in effect to limit individual liberty. According to Jennifer Nedelsky, Madison believed that government should “ensure the free

221. THE FEDERALIST NO. 44 (James Madison), id., at 227. 222. Id.

223. ELY, supra note 1, at 53–54.

224. The Fifth Amendment provides in part that no person shall be “deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” U.S.CONST. amend. V.

225. James Madison, Property, NATIONAL GAZETTE, Mar. 29, 1792, reprinted in 1 THE FOUNDERS’CONSTITUTION 598, 598–99 (Philip B. Kurland & Ralph Lerner eds., 1987).

226. Id. at 598. 227. Id. at 598–99.

228. See NEDELSKY, supra note 177, at 29–30 (stressing Madison’s endorsement of the right to acquire property).

exercise of the faculties of acquisition by preventing unwarranted or discriminatory restrictions on this freedom.”229 Government, in other words, was not just to protect the existing rights of owners but to preserve opportunity.

This is not to say that Madison ruled out all governmental regulations of property. He left room for the states to promote and control economic behavior, but he opposed both monopoly privilege and redistributive schemes that helped some at the expense of others.230

There is no way to determine the extent to which Madison’s views were representative of the Framers as a whole. But considering his key role in drafting the Constitution and Bill of Rights, it is appropriate to give special weight to his understanding of economic rights. Madison, moreover, left a lasting imprint on American constitutionalism. As Nedelsky observed,

[T]he notion that property and contract were essential ingredients of the liberty the Constitution was to protect, was common to Madison, Marshall, and the twentieth-century advocates of laissez-faire. And the idea that property and contract could define the legitimate scope of governmental power was a basic component of constitutionalism from 1787 to 1937.231

Certainly, Alexander Hamilton shared Madison’s distaste for legislative abridgement of contractual rights. Seen by some historians as the author of the Contract Clause, Hamilton pictured laws abridging contractual obligations as “atrocious breaches of moral obligation and social justice.”232 He stressed the utilitarian role of contracts in commercial life. In The Federalist, for example, Hamilton stated: “Laws in violation of private contracts . . . amount to aggressions on the rights of those States, whose citizens are injured by them . . . .”233 In his mind, state laws impairing contracts would negatively impact the flow of commerce among the states. Speaking of the various restrictions on state power in Article 10, Section 10 of the Constitution, Hamilton hailed “the precautions against the repetition of those practices on the part of the state governments, which have undermined the foundations of property and credit . . . .”234 Following ratification of the Constitution, Hamilton urged a broad

229. Id. at 29.

230. SIEGAN, supra note 217, at 59–60; ELY, supra note 1, at 49–50, 56. 231. NEDELSKY, supra note 177, at 228.

232. THE FEDERALIST NO. 7, at 43 (Alexander Hamilton) (Jacob E. Cooke ed., 1961).

233. Id. at 42.

reading of the Contract Clause to encompass state legislation impairing a state’s own obligations.235

Hamilton was not an adherent of a laissez-faire philosophy. As Secretary of the Treasury, he proposed an ambitious program of protective tariffs and subsidies to encourage economic growth.236 He also successfully recommended that Congress charter a national bank—a hybrid institution largely under private control—to stabilize the currency.237

Yet Hamilton was familiar with the work of Adam Smith and was a forceful supporter of a market economy based on private property and security of contracts.238 Although he saw room for government to promote business, he declared in 1801, “In matters of industry, human enterprise ought, doubtless, to be left free in the main, not fettered by too much regulation.”239

Other evidence of the likely intention of the Framers is provided by James Wilson. He had been heavily involved in the controversy over the repeal of the charter of the Bank of North America.240 In 1785, at the behest of radicals and agrarians, the Pennsylvania legislature revoked the charter of the bank.241 Wilson argued at length against this step, likening the charter to a contract.242 He maintained that state legislatures could not abridge contracts. As Nedelsky noted: “Not only did [Wilson] think that upholding contracts was extremely important economically, he saw the obligation of contract as part of the fundamental obligation to fulfill promises which makes society possible.”243

235. 4 THE LAW PRACTICE OF ALEXANDER HAMILTON 430–31 (Julius Goebel, Jr. & Joseph H. Smith eds., 1980). See generally C.PETER MAGRATH, YAZOO: LAW AND

POLITICS IN THE NEW REPUBLIC 21–30 (1966) (analyzing Hamilton’s argument that the Contract Clause prevented a state from breaking its contractual arrangement).

236. PETER MCNAMARA, POLITICAL ECONOMY AND STATESMANSHIP: SMITH, HAMILTON, AND THE FOUNDATION OF THE COMMERCIAL REPUBLIC 128–39 (1998).

237. Id. at 124–28.

238. Characterizing Hamilton as the “chief agent of a market economy,” a recent biographer has declared: “Hamilton did not create America’s market economy so much as foster the cultural and legal setting in which it flourished.” RON CHERNOW, ALEXANDER HAMILTON 345 (2004).

239. Alexander Hamilton, The Examination No. 3 (Dec. 24, 1801), in 25 THE

PAPERS OF ALEXANDER HAMILTON 467 (Harold C. Syrett ed., 1977). 240. SMITH, supra note 144, at 146, 150–53.

241. Id. at 148–55.

242. Id. at 152–53; Ely, supra note 206, at 15–18. 243. NEDELSKY, supra note 177, at 299 n.141.